Nothing has actually been done yet (why rush themselves?) but ABC News reports that the Securities and Exchange Commission is most definitely leaning in the direction of showing Joe Cassano and the AIG Financial Products team they mean business. Actually, that's not true that the regulator hasn't done anything-- the SEC has sent strongly worded letters to the possibly guilty parties making it clear that they intend to make Joe and Co pay, which should count for something. How bad? Money-wise, not bad at all. Fines could amount to $1 million, if that, but what is really upsetting and, we think, a bit extreme, is that these guys might lose their professional licenses, which could make finding new gigs kind of difficult. That's sure to weigh on JC during today's bike ride.
SEC officials have sent notifications of their intent to pursue enforcement against AIG FP executives, according to an article in the July issue of Corporate Counsel magazine. Such letters, so-called "Wells notices," inform targets that investigators have completed their work and are recommending the commission pursue financial penalties or other civil action.
Enforcement actions against individuals can result in financial penalties and the loss of a professional license, explained James Coffman, a retired 26-year veteran of the SEC's enforcement division. However, the executives at AIG FP did not appear to need any special licenses to concoct their exotic financial products whose collapse pushed the firm to the brink of bankruptcy. Thus they likely would face only financial penalties.
The penalties could range north of $1 million, Coffman said, which could be small change for some AIG executives. Joseph Cassano, the disgraced former chief of the Financial Products division, was receiving $1 million a month in 2008, after he had separated from the company. In all, Cassano reportedly reaped nearly $300 million with AIG, before leaving the helm of the Financial Products division last year.